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WASHINGTON: Obama’s budget proposal this week includes a $7500 tax credit for all electric vehicles like the Nissan Leaf or the Chevy Volt. Such proposals have popular support and seem on first glance a benefit to consumers and taxpayers alike. Upon further examination this particular initiative neither improves the environment nor helps the economy, but instead amounts to a transfer of wealth from the poor to the rich. Let’s look at it.

The assumption that electric vehicles are cleaner for the environment is not one without challenges. Electric vehicles get their fuel from the coal-driven power grid. They also introduce a new pollutant to the environment, substantial quantities of lead. When compared to the clean cars already on the market the new EVs do not present a substantial improvement to the environment:

What’s going on here? ”We’ve known for quite some time that zero-emissions cars wouldn’t make much difference if they substituted for very clean ones,” Robert Hahn, an economist at the American Enterprise Institute, said.

And new cars are very clean: the gasoline-powered cars mandated for California remove 95 to 98 percent of the pollutants detrimental to health. Note, too, that most plants in California generating electricity for the electric cars burn natural gas, emitting pollutants that offset part of the already modest gains made at the tailpipe. Peter Passell, New York Times

How popular are these vehicles and what kind of impact they will have in the environment is still being discovered. Last year is the first year the Leaf and the Volt were offered for sale. If you add January 2011 sales to the total of 2010 sales you get 650 Volts and 106 Leafs were sold in the entire US. The most hopeful 2011 sales forecast is 20,000. 20,000 vehicles will make no difference to our environment. Is the $220 million price tag worth it? Read more…

WASHINGTON (or is it Detroit?): The NIP was the first to call into question the Congressional witch hunts against Toyota. Our position was that all credibility of the National Traffic Safety Administration has been lost now that Obama is in the car business. Turns out we were right, but it goes much further.

When unions spend more than $60 million on an election, they demand results. That money put Andy Stern, head of the SEIU, in the White House more than any other visitor. Andy Stern warned us that the union thugs “prefer to use the power of persuasion, but if that doesn’t work we use the persuasion of power.”

Big money always means big influence. Unions came out on top when it came time restructure GM, ironic because unions were at the heart of the automaker’s troubles. Guess who receives barrels of union money:

We are told that 19 of the 36 Democrats on the House Energy and Commerce Committee were given sizable checks by the UAW for their election campaigns. We also learn that 12 of 25 Democrats on the House Oversight and Government Reform Committee got checks, too. In my opinion, such a conflict of interest puts Toyota at quite a disadvantage… Read more…

WASHINGTON (or is it Detroit?): Just as one Federal investigation of Toyota is winding down, the National Traffic Safety Administration announced today that they are launching an investigation of possible flaws in Toyota’s steering system, this time in the bread and butter Corolla line:

The National Highway Traffic Safety Administration will open an investigation into a possible flaw in the steering systems for the 2009-2010 Corolla, likely to lead to another massive recall for Toyota, ABC News has learned.

NHTSA says it has received 163 complaints about the steering causing the Corollas to veer from side-to-side. A number of accidents and injuries have been tied to the issue, according to federal officials. ABC News

While the NIP does not dispute the seriousness any Toyota car accident, we do have serious questions about the frequency of charges leveled against the automaker by the Federal government. Could the steady barrage of charges against the automaker be market manipulation? Read more…

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